This year will end with unemployment rates in the world's advanced economies at their highest levels since the Great Depression, and rates most likely won't return to pre-coronavirus pandemic levels until at least 2022, according to the Paris-based Organization for Economic Cooperation and Development.
“We are basically back where we were in 2010,” said Stefano Scarpetta, OECD director of employment, The Wall Street Journal reported Tuesday. “In three months, we’ve lost all the gains in employment that it took a decade to make.”
The research institute, which serves the United States and 36 other countries, also warned that emergency measures designed to support employment should not be prematurely withdrawn, and governments should launch new programs encouraging businesses to hire workers, especially people just entering the jobs market.
New partial lockdowns from a second wave of outbreaks could drive unemployment numbers even higher, said the OECD. In the United States, that could mean jobless rates of 12.9% this year and 11.5% next year, compared to 11.3% this year and 8.5% in 2021 in the case that there is no resurgence.
Scarpetta said that even if there are no further outbreaks, the jobless rate for OECD members will go to 9.4% in the last three months of this year, reaching a level that has not been seen since the 1930s. However, with a second wave of outbreaks, the jobless rate could go to 12.6%, he warned.
For next year, even without further outbreaks, the jobless rate is expected to fall gradually to 7.7% by the end of 2021. If there is a second wave, this rate is expected to go to 8.9%.
The OECD expects the United States to experience its largest rise in unemployment rate this year, going up by 7.6 percentage points, even though rates fell in May and June. Meanwhile, Scarpetta said governments must wind down furlough plans, in which they continue to pay workers' wages.
"We have to let market forces play a role,” Scarpetta said. “The market will tell which firms, and which jobs, are viable.”
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